22 Danckwerts LJ observed that:
No doubt the making of a complaint to the Bar Council or its Secretary, as the proper officer to receive the complaint, would attract qualified privilege, but I can find no ground for conferring the immunity of absolute privilege, since the Bar Council is no more than an investigating body, without, as it seems to me, any judicial or quasi-judicial functions or any disciplinary powers. (at 269)
23 The Bar Council performs, it would appear, a substantially similar role to the OSS in that it does not ultimately hear and determine complaints against barristers. That is a matter for the Benchers of the Inns of Court and those proceedings are, as I have said, the subject of absolute privilege.
24 Lincoln v Daniels has the advantage of being a decision of the Court of Appeal. Moreover, given its significance, it is somewhat surprising that it received no attention in Gray v Avadis. It may be, in any event, that there is a material difference between the contents of a spontaneous voluntary complaint such as the one which was made in the present case and the contents of a response, such as the one made in Gray v Avadis, to the OSS which has power to compel a response from a solicitor. That is not something however which falls to me to decide.
25 I am not persuaded, upon that analysis of the authorities that the law on this issue in England and Wales can be said to have been finally determined. That being so, it cannot in my view be realistically contended that the plaintiff's proposition that absolute privilege does not provide a defence in the present case, is unarguable. Accordingly, I reject the first of the defendant's submissions
26 The second basis upon which it is contended that the plaintiff's cause of action in respect of the first count is bound to fail depends upon what the defendant characterises as an argument about causation. It is submitted that the Matter Complained Of by the defendant did not lead to either the Intervention Order being made or for that matter the Prima Facie Finding, the Referral and the Notification.
27 For the purposes of this application, the defendant has tendered various items of correspondence. Included in that bundle is a two page report in which a recommendation is made by Mr David Clare, on behalf of the Solicitors Practice Unit, that the OSS should intervene in the plaintiff's practice "on the grounds that he has abandoned [his] practice". The defendant contends that it was upon the basis of that report that the Compliance and Supervision Committee of OSS subsequently resolved on 2 December 1997 to intervene in the plaintiff's practice. Accordingly, it is submitted that it was not the defendant's complaint that led to the Intervention Order being made but rather the actions or inactions of the plaintiff in abandoning his practice. Moreover it is pointed out that at no stage did the defendant raise an allegation in the Matter Complained Of that the plaintiff had abandoned his practice. Nor, it was submitted, was it relied upon by the OSS as a basis for the intervention order being sought or made. Reference was also made to s 35, and in particular, to Schedule 1 of the Solicitors Act 1974 (UK) which lists the circumstances in the Society may intervene in a solicitor's practice. The defendant relies upon the fact that an allegation that there has been a failure to meet debts which are payable is not included in the list.
28 The defendant then pointed to material which indicates that various other complaints had been made against the plaintiff in respect of his professional conduct. Mr Clare specifically referred to this material when he subsequently recommended that the plaintiff's conduct be referred to the Solicitors Disciplinary Tribunal. Clearly there are a number of such complaints, of which the Matter Complained Of is but one. The defendant further submits that his complaint is far from being the most serious one. In those circumstances, the defendant submits that it was inevitable that the resolutions would be made and that the OSS would have proceeded against the plaintiff regardless of the existence of the Matter Complained Of. To emphasise the point, the defendant brought to my attention a letter from the OSS in which it is stated that "the number and seriousness of the…matters meant that the SDT was the only appropriate forum to deal with Mr Murtough's conduct". Accordingly, it is submitted that the Prima Facie finding, the Referral and the Notification would have been made in any event and thus were not caused by the defendant's complaint.
29 So far as the first aspect of the matter is concerned it is important to have regard to the following passages which also appear in Mr Clare's report in which he recommends that the OSS should intervene in the plaintiff's practice:
It has now come to the Office's attention that Mr Murtough currently holds clients (sic) money in various client accounts with Barclays Bank plc in excess of £30,000. The Office has also learned that there is currently a garnishee nisi order from the Central London County Court attached to the money held in client accounts. This garnishee order has been obtained by Messrs. Lloyd & Co., Solicitors acting on behalf of Betham Associates. Betham are a firm of architects who were instructed by Mr Murtough as professional experts on various client matters. The Office is aware of Betham Associates claim (sic) against Mr Murtough as Lloyd & Co. have complained to the Office in respect of Mr Murtough's professional conduct in not paying the experts he instructed. It is understood from Lloyd & Co. that certain sums of money are held in a bank account at Barclay Banks to the joint order of Mr Murtough and the Betham Associates.
Whilst the Office accepts that Betham Associates may well be entitled to certain money to which the garnishee order has been attached, the Office is clearly concerned at the situation where client accounts, containing a sizeable sum of money, are the subject of a garnishee nisi order. In the circumstances, it is considered imperative that the Office be represented at the hearing on 11 December before the Central London County Court when the Court considers whether or not to make the garnishee order absolute. The only way the office would have standing to attend such a hearing would be if a formal resolution to intervene into Mr Murtough's practice had been made by Committee and accordingly the recommendation below is to intervene into Mr Murtough's practice on the grounds that he has abandoned his practice.
30 It would appear that the report, and in particular the last sentence of it, provides some insight into what motivated the OSS to act. In those circumstances, it is difficult to maintain that there is no causal link between the Matter Complained Of and the action taken by the OSS and the damage which is alleged to have flowed from it. The fact that the present defendant is not mentioned by name in Mr Clare's report is of no great moment because the overall effect of the material before me indicates that at the relevant time the defendant and Mr Betham were in large measure acting in concert and were pursing similar objectives. Moreover the fact that the formal resolution to intervene recites one of the available statutory grounds for doing so is not, in my view, determinative of the question of what it was that led to the making of that decision.
31 In the final analysis, the plaintiff submits that the Intervention Resolution (and the Prima Facie Finding, the Referral and the Notification) were all a natural and probable result of the making of the Disciplinary Complaint. Indeed it is submitted that they were the very consequences which the making of the complaint was likely to produce and was in fact calculated to produce.
32 In that context the plaintiff relies upon a letter dated 6 June 1997 from the defendant in which he makes it clear that he had contemplated the prospect of asking the OSS to intervene in the plaintiff's practice. The letter reads in part:
My serious concern is to get in the fees which are due to Ram & Co from Murtough & Co. In the absence of any sign from you that you were indeed dealing with matters as you promised you would, I wrote to Mr Peter Monaghan of the London Legal Aid Area Office. I enclose for your information copies of my letter dated 30 May and the enclosures and his reply which is dated 3 June 1997.
…
I ought now to be writing to the Office for the Supervision of Solicitors (OSS - formerly Solicitors Complaints Bureau) to ask them to intervene in your UK practice.
In view of the indication given in your letter to Adrian Betham I will refrain from contacting the OSS to give you time to submit the bills which have already been drafted. However please note that should there not be any evidence of bills of costs being submitted by Monday 30 June 1997 I shall proceed to contact the OSS without further reference to you.
33 The plaintiff also relies upon other material which I shall refer to in greater detail when dealing with the defendant's argument in relation to the second count. Suffice it to say that I have had regard to that material in the present context as well.
34 In any event I accept the plaintiff's contention that he does not have to establish that there was a single cause for the event in respect of which damages are claimed. As Kirby J said in Shorey v PT Ltd [2003] HCA 27:
It is a basic principle of the law governing the recovery of damages that a claimant does not have to prove that an impugned event was "the" cause, in the sense of the one and only cause. It is enough that the claimant shows that the event is "a" cause of the condition for which damages are claimed.
…
There is more than a hint in the reasoning of the majority in the Court of Appeal of a search for a single cause of the appellant's disability whereas the applicable law and the relevant facts contemplated that this was a case of multiple causes in which the fall and its outcomes could only be really understood in the context of events that happened before and after, rendering the appellant more susceptible to the kind of disability that in fact resulted. (pars 41-2)
35 His Honour then made the following observation concerning the correct approach to be adopted in a case where there were multiple causes:
So far as the evidentiary presumption is concerned, this is the presumptio hominis to which Dixon CJ referred in Watts . It stands in a plaintiff's favour and "any tribunal of fact should insist that the defendant should overcome [it]". The presumption was explained in these terms:
If the disabilities of the plaintiff can be disentangled and one or more traced to causes in which the injuries he sustained through the accident play no part, it is the defendant who should be required to do the disentangling and to exclude the operation of the accident as a contributory cause. If it be the case that at some future date the plaintiff would in any event have reached his present pitiable state, the defendant should be called upon to prove that satisfactorily and moreover to show the period at the close of which it would have occurred. (par 46)
36 As I have already observed, the defendant concedes that the Matter Complained Of was one of the matters that the OSS had before it when it recommended that the plaintiff's conduct be referred to the Solicitors Disciplinary Tribunal.
37 In those circumstances, it would in my view, be a bold move on the limited material which has been placed before me, to arrive at the conclusions for which the defendant contends and in particular to arrive at the inference which the defendant submits should be drawn as to what it was that prompted the OSS to act in the manner in which it did.
38 The plaintiff contends that even if it was not able to establish the necessary causal link between the Matter Complained of and the Intervention Order and the subsequent action taken by the OSS, then that would not of itself be fatal to its case. He submits that all that he needs to plead, and indeed to prove, is that the relevant statement is "calculated to cause pecuniary damage". See s 3(1) Defamation Act 1952 (UK). See also De Beers Abrasive Products Ltd & Others v International General Electric Co of New York Ltd & Anor [1973] 1 WLR 972. To publish of a solicitor that he has failed to pay substantial debts which were incurred by him in the course of his professional practice and which were then due and payable by him, and that he is guilty of professional misconduct is, it is submitted, plainly calculated to cause pecuniary damage to a solicitor in his or her profession. Indeed during the course of giving evidence in December 2002, in proceedings taken by him in this Court to set aside a default judgment which had been obtained against him by the plaintiff, the defendant acknowledged that he was aware that the complaint which he had made could have "serious consequences" for a professional person in the position of the plaintiff. In all the circumstances I reject the second basis upon which the defendant challenges the first count.
39 The third and final basis upon which the defendant challenges the first count concerns the question of damages. The challenge is very much confined in its scope and is limited to what is contained in paragraphs 31.7 & 31.8 of the ASOC, which are in the following terms:
31.7 the Plaintiff has sustained serious damage to his personal and professional reputation with the Law Society, the English legal profession, the New South Wales Bar Association, and the New South Wales legal profession.
31.8 Since approximately October 1997, the Plaintiff has suffered from episodes of generalised anxiety disorder and major depressive disorder, and distress and embarrassment, which have been caused, contributed to and/or aggravated by the publication of the matter complained of and the consequences thereof.
40 The defendant concedes that were he to be successful in respect of this argument, then the consequence would be simply that the relevant parts of the claim would be struck out. It would not result in the summary dismissal of the count itself. Moreover the defendant does not dispute the plaintiff's entitlement to seek damages of the kind claimed in paragraph 31.1 - 31.6 inclusive. The defendant also concedes that the plaintiff is entitled to seek and recover damages for any loss to his professional reputation. It is submitted however that he is not entitled to recover damages for any loss to his personal reputation (which is said to be the subject of part of the claim in paragraph 31.7) or for personal injuries of the type claimed in paragraph 31.8.
41 The latter question was considered in the Court of Appeal in England in two recent decisions. In Joyce v Sengupta & Anor [1993] 1 All ER 897, Sir Donald Nicholls VC, with whom Butler-Sloss LJ agreed, considered at some length the question of whether damages for distress and injury to feelings were recoverable.
42 His Lordship said:
The plaintiff claims, thirdly, that as a consequence of the article she suffered anxiety, distress and injury to her feelings. Mr Browne submitted that this third head of damages is irrecoverable as a matter of law and should be struck out. Mr Robertson QC contended that, although at common law proof of pecuniary damage was an essential ingredient of the tort, once pecuniary loss is established, or a claim under s 3 is made out, a plaintiff is entitled to recover his whole loss. If he suffered mental distress, the law will include an award of damages under this head also.
The point seems never to have been decided. As already noted, it is well settled that a common law proof of 'special damage' is an essential ingredient in this cause of action. At common law if such damage is not established the action will fail. Lord Robertson emphasised this is Royal Baking Powder Co v Wright Crossley & Co (1900) 18 RPC 95 at 103:
'Unless the Plaintiff has in fact suffered loss which can be and is specified, he has no cause of action. The fact that the Defendant has acted maliciously cannot supply the want of special damage, nor can a superfluity of malice eke out a case wanting in special damage.'
With one exception there is no authority dealing expressly with the question whether, if pecuniary loss is established, a plaintiff can also recover damages for anxiety and distress. The authorities are silent on the point. Thus, so far as reported decisions go, they show that an award of 'parasitic' damages under this head has never been made for malicious falsehood. The one exception is an observation of high authority. In Fielding v Variety Inc [1967] 2 All ER 497 at 499, [1967] 2 QB 841 at 850 Lord Denning MR stated, in the context of a case where s 3 was being relied on, that the plaintiffs could only recover damages for probable money loss and not for their injured feelings.
This state of the authorities suggests that damages for anxiety and distress are not recoverable for malicious falsehood. If that is the law it could lead to a manifestly unsatisfactory and unjust result in some cases. Take the example I gave earlier of a person who maliciously spreads rumours that his competitor's business has closed down. Or the rumour might be that the business is in financial difficulty and that a receiver will soon be appointed. The owner of the business suffers severe financial loss. Further, because of the effect the rumours are having on his business he is worried beyond measure about his livelihood and his family's future. He suffers acute anxiety and distress. Can it be right that the law is unable to give him any recompense for this suffering against the person whose malice caused it? Although injury to feelings alone will not found a cause of action in malicious falsehood, ought not the law to take such injury into account when it is connected with financial damage inflicted by the falsehood?
One turns to analogous torts for guidance. Inducement of breach of contract is another tort in which proof of damage is an essential ingredient. In Pratt v British Medical Association [1919] 1 KB 244 at 282, [1918-19] All ER Rep 104 at 122 McCardle J took humiliation and menace into account when assessing the damages. Likewise in conspiracy (see directions to the jury in Quinn v Leathem [1901] AC 495 at 498). A close analogy is that of slander in a case where it is actionable only on proof of pecuniary damage. In Lynch v Knight (1861) 9 HL Cas 577 at 598, 11 ER 854 at 863, Lord Wensleydale said:
Mental pain or anxiety the law cannot value and does not pretend to redress, when the unlawful act complained of causes that alone; though where a material damage occurs, and is connected with it, it is impossible a jury, in estimating it, should altogether overlook the feelings of the party interested.
The point bristles with problems, not all of which were explored in argument. One possibility is that in an action for malicious falsehood damages are limited to financial loss. That would mark out a clear boundary, but it would suffer the drawback of failing to do justice in the type of case I have mentioned. I instinctively recoil from the notion that in no circumstances can an injured plaintiff obtain recompense from a defendant for understandable distress caused by a false statement made maliciously. However, once it is accepted there are circumstances in which non-pecuniary loss, or some types of non-pecuniary loss, can be recovered in a malicious falsehood action, it becomes extremely difficult to define those circumstances or those types of loss in a coherent manner. It would be going too far to hold that all non-pecuniary loss suffered by a plaintiff is recoverable in a malicious falsehood action, because that would include injury to reputation at large. The history of malicious falsehood as a cause of action shows it was not designed to provide a remedy for such injury: the remedy for such loss is an action for defamation in which, incidentally, damages for injury to feelings may be included in a general award of damages ( see Fielding v Variety Inc [1967] 2 All ER 497 at 500, 502, [ 1967] 2 QB 841 at 851, 355 per Lord Denning MR and Salmon LJ).
Nor would these difficulties be solved by rejecting damages for distress as a separate head of loss in a malicious falsehood action but permitting distress to be taken into account as an aggravating factor. On this footing the judge or jury could take injury to feelings into account when awarding a lump sum of damages 'in the round'. I do not see how, if only pecuniary loss is recoverable , the amount awarded can be increased to reflect the plaintiff's distress. That would be a contradiction in terms. It would be to award damages for distress in a disguised fashion. If distress can inflame the damages recoverable for pecuniary loss, the difference between awarding aggravated damages for that reason and awarding damages for distress as a separate head of loss is a difference of words only.
My conclusion is that, on the limited argument addressed to us, it would undesirable to decide this point. (at 906-8)
43 Sir Michael Kerr said:
I agree with the judgment of Sir Donald Nicholls V-C and the order which he proposed. I only add a few words on the issues relating to damages. However, I do so with some hesitation, since my remarks refer to authorities which were not canvassed in the arguments before us. I therefore mention them merely as an aide mémoire for the sake of completeness. (at 908)
44 Having reviewed some of the authorities His Lordship concluded:
As already mentioned, in my view all these authorities must be equally applicable to claims for malicious falsehood. Furthermore, I can see no reason why they should apply any differently according to whether the plaintiff pleads that he has suffered special damage in the form of some pecuniary loss, as he had to before 1952, or whether he now takes advantage of s 3 of the Defamation Act 1952, as in the present case. But they only support the possibility of an award for aggravated general damages, not for an additional claim for distress and injury to feelings, as is expressly claimed in the present case.
I would accordingly strike out this claim as such, although I recognise that something of the same nature could still be recovered as an ingredient of a possible award of aggravated damages. However, since none of the foregoing authorities were considered in the arguments before us and the issue was not explored in depth, I agree that it would be undesirable to decide this point at the present stage and that the pleading should be left as it stands. (at 911-12)
45 In Khodaparast v Shad [2000] 1 All ER 545, Stuart Smith LJ referred, with approval, to the dicta of Nicholls V-C in Joyce. His Lordship concluded:
Malicious falsehood is a species of defamation. It is well established that aggravated damages can be awarded for defamation of character for the additional injury to feelings caused by the defendant's conduct both before and after the issue of proceedings. In my judgment, once the plaintiff is entitled to sue for malicious falsehood, whether on proof of special damage or by reason of section 3 of the 1952 Act, I can see no reason why, in an appropriate case, he or she should not recover aggravated damages for injury to feelings. As Nicholls V.-C. pointed out, justice requires that it should be so. (at 556)
46 Otton LJ agreed. His Lordship said:
Even though she could not be compensated for loss of her reputation, on the particular facts of this case she was clearly entitled, in my view, to recover damages for the aggravation caused by the defendant's insulting behaviour in accordance with Nicholls V.-C. and Sir Michael Kerr in Joyce v. Sengupta to which Stuart-Smith LJ has referred. (at 558)
47 It is plain in my view, given the state of the authorities, that the Court of Appeal has not definitively decided the issue. Accordingly, it cannot be said that the claim for damages made in paragraph 31.8, is unarguable.
48 I also accept the plaintiff's submission that the reference to damage to his personal reputation in paragraph 31.7, when read in context, relates not to reputation in a general sense but only insofar as it pertains to his professional reputation with the various professional bodies and the legal profession. Accordingly I reject the final submission made by the defendant in respect of the first count.